Speaking as an (barely) INT AM, here's my 2 cents.
Entry fees are a prohibitive cost for me when they cross the $30 mark. A local club tourney for $20, and they usually have a stamped disc? Sure, no problem. That's not to say the higher fee will be a deal breaker, but I will look at the player's pack to decide how deep I'm willing to go to pay to play a course I can play for free the next day. To drive to Kansas City, stay in hotel for 2 nights, eat and all the other expenses that come from staying out of town to then put up $60 (I'm making up this number) to play in a tournament with a large field of players, many of whom are no doubt far better than I, in which I will most likely not place? Not without a good-looking players pack.
I'll go with KC for this example. Here's my math:
The opportunity to play KC's awesome courses= The gas money/hotel fees/food. I have made this trip before. 1 overnight stay let me play 7 courses. At my leisure. My pace. This is worth it. I didn't have to put up entry fee money to do it. If I tack on another night's stay, that lets me play 3-4 more courses. At my leisure.
Add in the cost of entry, limit my playing field choices for my time spent here away from the family, add in the fact that I'm now playing with guys I don't know and subtract a player's pack from that equation= I'm not going to play it. I'll wait until the following weekend, plan a trip with my kids and my buddy and play those same tournament-ready courses on my own time.
Player's Packs are an important part of the draw. It puts new plastic in player's hands, so the manufacturers should support this well (maybe a buy-back program on the manufacturer's part to help support the tournament scene and the TD's who run them). If I choose to play in a tournament, I'm still playing for fun, and part of the fun is the disc on the wall and the t-shirt that I wear to the point of disintegration. Take that away and I'm only contributing to the pockets of 9 people. No fun at all.
As far as depth of payout, I think that the top 3 get paid in each division. Period. Pay them in cash, not merch, but only pay the top 3 finishers. If there are CTP's, putting competitions, long drives, etc. pay them in merch. And then sell merch to everyone else.
Just my thoughts.